Laws for Buying a Car
If you buy a car there are certain things you must know about the laws regarding car sales. You should know whether your car contract needs to be in writing in order to be enforced and whether the dealer should sign the contract. You should know what evidence can be presented in court if there is a dispute over the contract. And you should also know whether the sales contract can be canceled as well as financing and vehicle disclosures.
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Written Contracts
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Car contracts worth $500 or more must be put in writing. The Uniform Commercial Code (UCC) states that all contracts for the sale of goods worth $500 or more must be in writing and signed by the party to be charged. For example, if a car dealer provided his buyer with a signed contract for the sale of a car worth $20,000 and the dealer never signed the contract, the buyer can't sue the dealer if the dealer later decides not to convey the car to the buyer. Almost all the states have adopted the UCC or laws similar to it.
Parol Evidence Rule
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The parol evidence rule (PER) states that when there is a written contract the courts will generally only look to the actual contract and reject information not contained in that document. The PER states that a court will not accept evidence of a prior oral or written agreement that varies or contradicts the contract. For example, if you entered into a written contract with a dealer to buy a car for $20,000 and then you sued that dealer because he wouldn't sell it to you for $10,000, you would not be able to bring into court testimony of another person who witnessed you and the dealer agreeing before the contract was executed that the car would cost $10,000. But you can submit evidence of an agreement made after the contract.
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Contract Cancellation
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At times it may be possible to cancel a car sale contract. If the contract contains cancellation provisions then it may be canceled through such provisions. If the dealer entered into a contract with a minor then the minor may be able to cancel the contract because the law may consider him to lack the legal capacity to enter into a contract. If the dealer sold you a car that is different than what he promised, you may try to cancel the contract because of breach of warranty.
Truth In Lending Act
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The Truth In Lending Act (TILA) requires that creditors, like those who give you loans to buy a car, disclose certain information about their loans. First, the creditor must disclose the loan's annual percentage rates (APRs). Second, the creditor must disclose how he determines the finance charge. Third, he must disclose the balance used to determine the finance charge. Fourth, he must disclose the actual amount of the finance charge. Fifth, he must disclose the total amount of the loan. Sixth, he must disclose the total amount of money that the debtor will have to pay (finance charge plus loan). Finally, he must disclose the amount for each periodic payment and dates the payments are due.
Disclosures
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A seller must disclose truthful information about a car. He must, if possible, give the buyer the vehicle's full service record as well as other correct information. Otherwise a buyer may sue for misrepresentation, deceit or breach of warranty.
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